Top-ups of teacher pension traced back to 1991 agreement

As the province's teachers and the government try to reform pensions for the future, both sides are looking to the past.

Province contends payments were no longer needed after fund became solvent in 2000

As the province's teachers and the government try to reform pensions for the future, both sides are looking to the past.

The teachers union says an old agreement requires the province to keep topping up the pension fund.  But the finance minister says there's no such requirement and the money should have stopped years ago.

The provincial government started topping up the teachers pension fund in 1991 after signing a deal to do so because the pension fund was short on money.

The province made annual payments until 2000, when the fund was fully solvent again.

Finance Minister Blaine Higgs contends the province hasn't had to make special payments to the teachers' pension plan since 2000. (Brian Chisholm/CBC)
But in 2003, the province started making the special payments once again, contributing $69 million.

The payments continued annually since then, increasing by $3 million or $4 million each year, until reaching $99 million last year.

Since 2003, the provincial government has poured an extra $836 million into the pension fund for members of the New Brunswick Teachers' Federation.

Federation co-president Peter Fullerton says the union assumes that money was required under the original 1991 agreement.

"Why would you restart then if you didn't feel obligated," said Fullerton.

But the 1991 legislation required payments only until the plan was fully funded, which it was in 2000.

Finance Minister Blaine Higgs says there was no legal obligation for the province to make the special payments into the teachers pension fund when it was short money in the last decade.

"I guess it was a decision made at the time," said Higgs. "I wasn't there. I guess we could go through a number of things over the years where we could say in hindsight we might have done things differently."

Higgs says is not upset that the spending could have been avoided.

"All through my working career when someone came to me and said, `Here's something, guess what, we've been doing for 10 years and we just found out we don't need to do it,' I never took them to task for not finding out sooner," said Higgs. "I said, `Great job, let's find some more.' That's exactly how I feel about this."

Those payments have been cut off in the the budget Higgs delivered last week for 2014-15.

The change in approach comes at a time when the province and teachers' union are trying to negotiate a new pension arrangement.

The union believes the province is still obligated to make the top-up payments and says Higgs's decision to stop them is getting those negotiations off on the wrong foot.


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